IMF fails to solve currency rows

Members of the International Monetary Fund fail to resolve deep differences that threaten to unleash a full-scale ‘currency war’

Timothy Geithner spoke at a meeting of the International Monetary Fund (Alex Brandon)
Members of the International Monetary Fund (IMF) last night called for “urgent
action” to bolster its powers to combat threats to the global economy.

Delegates failed, however, to resolve deep differences that threaten to
unleash a full-scale “currency war”.

In a communiqué published after two days of talks in Washington, IMF ministers
admitted that volatile capital flows, exchange-rate fluctuations and
swelling currency reserves threatened the global recovery.

“Stronger and even-handed surveillance to uncover vulnerabilities in large,
advanced economies is a priority,” the communiqué said.

Ministers called on the IMF to study how better to manage capital flows but
postponed concrete decisions until next year.

Timothy Geithner, the US Treasury secretary, had earlier called for China to
allow its currency to appreciate amid concerns that a weak yuan is
distorting the global economy.

Geithner linked the level of China’s currency to a deal that would give
emerging economies more voting power